The Window of Opportunity is Now
Political strategist and author recommends urgency
Shreveport’s low energy costs and abundant natural resources open the area to significant growth opportunities, provided there is a quick transition to embrace processing. That was the message from New York Times bestselling author and geopolitical strategist Peter Zeihan at BRF’s annual event Jan. 12 at The Strand Theatre.
“The potential for outsized success here is robust,” Zeiihan said. “But chop chop. The clock is ticking.”
Zeihan explained that northwest Louisiana’s proximity to the Haynesville and Fayetteville shales equates to some of the lowest energy costs in the United States, which “bar none has the cheapest energy in the world, outside of Iceland.” This area should use that efficient energy to process the area’s raw materials, such as timber, instead of shipping those raw materials elsewhere for processing.
“If this were a bigger metro area, the existing demand profile would be pretty big, and you would be competing with a lot of other sectors,” he said. “Because you are a relatively isolated population center in this relative sea of energy, you’ve got this opportunity to go into the lower rungs of the value-added scale without any competition, and you’ve got a lot of land to do it with.
“Your opportunity to become the only processing facility within 700 miles … that just doesn’t happen. Ever. It’s wonderful.”
In his presentation, Zeihan explained how Russia’s war in Ukraine, instability in China, global demographics and other international economic pressures created this unique opportunity for this region.
He suggested two specific steps the region can take to leverage that opportunity.
“Establish industrial parks of size,” he said.
“People are going to need to know that they are going to have access to infrastructure and electricity at volume. You should probably go ahead and start looking into what it would take to drastically increase the amount of power generation you have in your immediate area. That will be the biggest single limiter on growth.”
Zeihan said those steps increase the value of the area’s raw materials.
“The commodities are already here, you just ship them out raw,” he said. “Take them up the value added scale. Do the processing. Because the demand for that in the United States is already robust. But the demand for that internationally is about to go absolutely bananas.”
Processing is the catalyst of a ripple effect in the local economy, Zeihan said.
“If you do get into processing, that naturally leads to the ability of small business to take what is processed and turn it into something else,” he said. “But you have got to do the processing first. Otherwise, you’re importing the processing stuff from somewhere else, and then you are competing with everyone else, and you don’t have an advantage. You do it here, and that’s a very different situation.”
Zeihan said the region’s economy could grow without switching to processing, but this unique set of circumstances does not present itself often.
“If you do absolutely nothing, everything produced in this area is going to be worth more going forward, and the market will continue to nudge everything up,” he said. “But you would be missing some pretty golden opportunities. This opportunity is like a once in a 50-year sort of thing.”
The lack of a processing economy is not unique to northwest Louisiana within the United States, Zeihan said. But this region is uniquely suited to address it.
“We have the highest skilled labor force in the world, and we produce more commodities than anyone else in the world,” he said of the United States. “But that stuff in the middle we are really not good at. But the geography here suggests that you can be. And if you throw in global shortages, especially if everything happens with China the way that I am thinking, it’s got to go somewhere. It might as well go somewhere where there is a competitive advantage. That’s here.”
As a political strategist, Zeihan uses demography, economics, energy, politics, technology and security to help clients best prepare for an uncertain future. He has published four books: “The Accidental Superpower,” “The Absent Superpower,” “Disunited Nations” and “The End of the World is Just the Beginning: Mapping the Collapse of Globalization.”
BRF is an economic development organization dedicated to diversifying north Louisiana’s economy. It fulfills that mission through initiatives that start new businesses, recruit new businesses and retain current businesses in the region, and support the development of a science and technology-based workforce.